Schedule 8812 (Form 1040A): Additional Child Tax Credit (2020) – A Guide for Taxpayers

What Schedule 8812 (Form 1040A) Is For

Schedule 8812 is a supplemental tax form that helps families claim the Additional Child Tax Credit (ACTC). Think of it as a ""second chance"" credit that can put money back in your pocket even if you don't owe any federal income tax. While the regular Child Tax Credit can only reduce the tax you owe to zero, the Additional Child Tax Credit goes further—it's refundable, meaning the IRS can send you a check for the difference.

For the 2020 tax year, families could claim up to $2,000 per qualifying child through the Child Tax Credit, with up to $1,400 of that amount available as a refund through the Additional Child Tax Credit. This form is particularly valuable for lower- and moderate-income working families who may not owe much tax but have earned income from working. The credit recognizes that even if your tax bill is small or zero, you're still supporting your children and deserve this benefit.

To use this form, you must first determine that you're eligible for the Child Tax Credit by completing the Child Tax Credit and Credit for Other Dependents Worksheet in your Form 1040 or 1040-SR instructions. Schedule 8812 comes into play when your Child Tax Credit exceeds your tax liability, allowing you to claim the refundable portion.

When You'd Use Schedule 8812 (Form 1040A)

You'll complete Schedule 8812 when filing your original 2020 tax return if you meet certain conditions. Specifically, you'll need this form if you answered ""Yes"" to questions at the end of your Child Tax Credit worksheet indicating that you have unused credit available and at least one qualifying child under 17.

For late filers, you can still claim the Additional Child Tax Credit on a return filed after the original deadline (April 15, 2021, or October 15, 2021 with an extension), as long as you file within three years of the original due date. The IRS generally allows taxpayers to claim refunds within this three-year window.

For amended returns, if you need to correct your 2020 return to claim the Additional Child Tax Credit you missed, you'll file Form 1040-X (Amended U.S. Individual Income Tax Return) and attach a completed Schedule 8812. However, there's an important caveat: both you and your qualifying child must have had the required Social Security numbers issued by the original due date of your 2020 return (including extensions). You cannot claim the credit for the first time on an amended return if you or your child didn't have valid identification numbers by that deadline.

One critical timing note: the IRS cannot issue refunds claiming the ACTC before mid-February of the following year. This applies to the entire refund, not just the ACTC portion—so if you file early, expect to wait.

Key Rules or Details for the 2020 Tax Year

Several important rules determine who can claim this credit and how much you can receive. First, earned income is essential—you must have at least $2,500 in earned income from working. This includes wages, salaries, tips, and self-employment income. Unearned income like investment returns doesn't count.

Social Security number requirements are strict. Each qualifying child must have a Social Security number that's valid for employment, issued before the due date of your 2020 return. Individual Taxpayer Identification Numbers (ITINs) don't qualify for the ACTC, though they may allow you to claim the non-refundable Credit for Other Dependents instead.

You and your spouse (if filing jointly) must also have a valid taxpayer identification number—either an SSN or ITIN—issued by your return's due date. Without this, you cannot claim any child tax credit or the additional credit.

Foreign earned income exclusion disqualifies you. If you file Form 2555 to exclude foreign earned income, you cannot claim the Additional Child Tax Credit, regardless of your other qualifications.

Special election for 2020: Due to legislation responding to economic challenges, you could elect to use your 2019 earned income instead of your 2020 earned income when calculating the credit—but only if your 2019 income was higher. This helped families whose income dropped in 2020.

Previous credit denials matter. If the IRS denied or reduced your child tax credit in a previous year (after 2015) for any reason other than a math error, you must file Form 8862 with your 2020 return to claim the ACTC. Intentional misuse carries serious penalties: a two-year ban from claiming the credit for reckless disregard of the rules, or a ten-year ban for fraud.

Step-by-Step (High Level)

The process for claiming the Additional Child Tax Credit follows a logical sequence through multiple parts of the form.

Part I – All Filers

Start by transferring information from your Child Tax Credit worksheet. Enter the amount of unused Child Tax Credit from that worksheet (line 1), then enter your actual tax liability from Form 1040 (line 2). Subtract to find your potential Additional Child Tax Credit. Next, count your qualifying children under 17 who have valid Social Security numbers and multiply that number by $1,400. This establishes the maximum additional credit you could receive.

You'll then calculate 15% of your earned income above $2,500. If your earned income is $10,000, for example, you'd subtract $2,500 to get $7,500, then multiply by 0.15 to get $1,125. This formula ensures the credit phases in gradually as you earn more from working.

Decision point: If you have fewer than three qualifying children, skip Part II and take the smaller of your maximum credit or your calculated amount from Part I. That's your Additional Child Tax Credit.

Part II – Three or More Qualifying Children

This section offers an alternative calculation method that may result in a larger credit for bigger families. You'll add up your withheld Social Security, Medicare, and Additional Medicare taxes from all your W-2 forms, then add certain self-employment and other taxes. After subtracting other refundable credits you're claiming, you compare this amount to your Part I result and use whichever is larger.

Part III – Your Final Credit

Enter the amount you calculated on line 15, and transfer this to line 28 of your Form 1040, 1040-SR, or 1040-NR. This amount will be added to your refund or reduce any balance you owe.

Common Mistakes and How to Avoid Them

Missing or Incorrect Social Security Numbers

Missing or incorrect Social Security numbers are the most frequent error. Double-check that every SSN you enter matches the Social Security card exactly, including checking the ""Child tax credit"" box in column 4 of your return's Dependents section. If a child has an ITIN instead of an SSN, they cannot be used for the Additional Child Tax Credit—only the non-refundable Credit for Other Dependents.

Forgetting the Earned Income Threshold

Forgetting the earned income threshold. Many taxpayers complete the form without realizing they need at least $2,500 in earned income. Review your Form W-2 boxes for wages and Form 1040 Schedule 1 for self-employment income. Investment income, unemployment benefits, and Social Security don't count toward this requirement.

Using the Wrong Earned Income Figure

Using the wrong earned income figure. The earned income definition is specific and excludes certain amounts like scholarships, prison wages, and nonqualified deferred compensation. Follow the Earned Income Chart in the Schedule 8812 instructions carefully, or better yet, use Publication 972's detailed Earned Income Worksheet if you have self-employment income or unusual situations.

Mathematical Errors in Part II

Mathematical errors in Part II. The worksheet for filers with three or more children involves multiple tax calculations and can be confusing. If your employer withheld Additional Medicare Tax, use the special Line 9 Worksheet in the instructions—don't just copy Form W-2 box 6, as this includes Additional Medicare Tax that must be subtracted. Take your time with this section and consider using tax software to catch calculation errors.

Failing to Attach Form 8862 When Required

Failing to attach Form 8862 when required. If the IRS rejected or reduced your Child Tax Credit in any year after 2015 for reasons beyond a simple math error, you must complete and attach Form 8862 to reclaim the credit. Filing without this form will delay processing and may result in denial of your credit.

Overlooking the Prior Year Income Election

Overlooking the prior year income election. For 2020, if your income dropped from 2019, you could use your higher 2019 earned income to calculate a larger credit. To make this election, write ""PYEI"" and your 2019 earned income next to Form 1040 line 28. This special provision helped many families during economic downturns but was easy to miss.

What Happens After You File

The IRS processes Schedule 8812 along with your complete tax return. Due to legal requirements, refunds claiming the ACTC cannot be issued before mid-February, even if you file in January. This delay applies to your entire refund, not just the ACTC portion—it's designed to give the IRS time to verify employment and income information.

During processing, the IRS will verify that your qualifying children have valid Social Security numbers and that you meet earned income requirements. They cross-reference W-2 information reported by employers with what you entered on your return. If information doesn't match or SSNs don't validate, you'll receive a letter requesting clarification or documentation.

Math Corrections and Eligibility Issues

Math errors are corrected automatically without penalty. If the IRS finds a calculation mistake, they'll adjust your refund amount and send you a notice explaining the change. However, if they discover you don't meet the eligibility requirements—for example, a child doesn't have the required SSN or doesn't meet the relationship test—they'll deny that portion of the credit and may request repayment of any funds already issued.

Effect on Government Benefits

The refund is protected from welfare benefit calculations. Any Additional Child Tax Credit refund you receive cannot be counted as income when determining eligibility for federal benefit programs like Medicaid, Supplemental Security Income (SSI), or nutrition assistance. The refund also cannot be counted as a resource for at least 12 months, meaning it won't disqualify you from these programs if you save it.

Consequences of Incorrect or Fraudulent Claims

If the IRS denies your claim due to eligibility issues or intentional disregard of the rules, you'll face restrictions on claiming the credit in future years. Simple mistakes don't trigger penalties, but reckless errors result in a two-year ban, and fraudulent claims result in a ten-year ban from claiming the Child Tax Credit, Additional Child Tax Credit, or Credit for Other Dependents.

FAQs

Can I claim the Additional Child Tax Credit if I don't owe any income tax?

Yes—that's precisely what makes this credit valuable. Unlike the regular Child Tax Credit which only reduces your tax bill to zero, the Additional Child Tax Credit is refundable. If you meet the requirements (especially having at least $2,500 in earned income), the IRS will send you a refund check for the credit amount even if your tax liability is zero. This helps working families who may have modest incomes but still incur expenses raising children.

What's the difference between a Social Security number and an ITIN, and why does it matter?

A Social Security number (SSN) is issued by the Social Security Administration to U.S. citizens, permanent residents, and certain visa holders authorized to work. An Individual Taxpayer Identification Number (ITIN) is issued by the IRS to people who need to file taxes but aren't eligible for an SSN. For the Additional Child Tax Credit specifically, only children with SSNs valid for employment qualify. If your child has an ITIN instead, you may claim up to $500 through the Credit for Other Dependents, but not the $1,400 Additional Child Tax Credit.

My income dropped significantly in 2020. Can I use my 2019 income instead?

Yes, 2020 was unique in allowing taxpayers to elect to use 2019 earned income if it was higher than 2020 earned income. This special provision helped families whose income decreased due to economic disruptions. To make this election, complete the earned income calculation using your 2019 figures and write ""PYEI"" (Prior Year Earned Income) next to Form 1040 line 28 along with your 2019 earned income amount. This could result in a larger Additional Child Tax Credit.

I have four children—should I complete Part II of Schedule 8812?

If you have three or more qualifying children, you should complete both Part I and Part II, then use whichever calculation gives you the larger credit. Part II offers an alternative formula based on your Social Security and Medicare taxes withheld, which often benefits larger families. The form walks you through both calculations and tells you which amount to use, so there's no guesswork—always calculate both when you have three or more qualifying children.

What if my child's Social Security number wasn't issued until after I filed my return?

Unfortunately, timing is critical. The Social Security number must be valid for employment and issued before the due date of your 2020 return, including any extensions. If you filed on April 15, 2021 without an extension, the SSN must have been issued by that date. You cannot claim the Additional Child Tax Credit for that child on an amended return if the SSN wasn't issued by your original deadline, even if it's issued shortly thereafter. You may, however, claim the Credit for Other Dependents if the child had an ITIN by the deadline.

The IRS denied my Child Tax Credit two years ago due to a documentation issue. Can I claim the Additional Child Tax Credit now?

Yes, but you must file Form 8862 (Information to Claim Certain Credits After Disallowance) along with Schedule 8812. This form requires you to prove that your child meets all the qualifying conditions. Without Form 8862 attached, your claim will be automatically denied. The requirement applies to any denial after 2015 that wasn't just a math or clerical error—such as documentation issues, relationship tests, or residency questions. Check the Form 8862 instructions for limited exceptions to this requirement.

How long do I have to claim the Additional Child Tax Credit if I forgot it on my original return?

Generally, you have three years from the original due date of your return to file an amended return claiming a refund. For 2020 returns, that means you typically have until April 15, 2024 to file Form 1040-X and claim the Additional Child Tax Credit you missed. However, remember that you and your qualifying children must have had the required taxpayer identification numbers issued by your original return's due date—you cannot establish eligibility for the first time on an amended return if you didn't meet this requirement initially.

Sources

Sources: IRS Schedule 8812 Instructions (2020), IRS Publication 972 (2020), IRS Child Tax Credit Information

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